Morning Gold Fix – October 25, 2011
FMX | Connect – www.fmxconnect.com - (Reported 10/25/2011)
The following is a summary of yesterday’s US gold activity and a recap of Asia & European markets overnight. It includes our proprietary options analytics and news stories from industry professionals.
Summary December Gold settled at $1,652.30 per troy ounce on Monday, a gain of $16.20 for the day.
December gold was up $4.9 to $1657.2 per 100 troy ounces as of 8:15 am EST this morning. The December U.S. dollar index was up 0.078 to $76.340. January platinum was up 9.0 to $1551.0 per 50 troy ounces. December silver was up 7.1 cents to 31.715.
Market Recap
Gold rallied on Monday despite questionable progress out of Europe. Instead, the metal tracked encouraging economic data out of China (expanding manufacturing) and Japan (increased September exports). The market is expecting greater resolution on the European debt crisis after the summit Wednesday.
December Gold trended higher but very little enthusiasm carried over to option trading. Volatility languished during the rally, with November and December contracting approximately 2% on settlement, and more so in the afternoon session. Calls and straddles were offered, and then offered cheaper because of the light volumes trading. Market participants are understandably cautious; not only is Wednesday a big news day on account of the European summit, it is also November options expiration. As such, the next 48 hours present many perils to option traders.
Much like Gold, silver shares the potential for an explosive breakout. Be sure to check out Silver: Ready to Pop or Drop for our take and trend-vol indicator.
Market Prices
In the News
Bloomberg (Reported 10/25/2011)
Gold may gain for a third day in London as concerns about Europe’s debt woes spur demand for the metal as a protection of wealth. Europe’s banks clashed with politicians on the size of losses they will accept on Greek bonds, lowering the likelihood of a deal at a summit tomorrow. Federal Reserve Bank of New York President William C. Dudley said the central bank may do more to hold down borrowing costs. The Diwali religious festival this week in India, the biggest gold buyer, may spur physical demand. Gold May Gain for a Third Day on Europe Woes
Reuters (Reported 10/25/2011)
Gold was set for a third consecutive daily rise on Tuesday, benefiting from growing investor optimism over the ability of European leaders to stem the spread of the debt crisis, which restricted gains in the U.S. dollar. EU leaders are to meet on Wednesday with tentative plans in place for Greece's debt to be reduced, European banks to be recapitalized and the euro zone's EFSF rescue fund to be increased to provide partial insurance for sovereign bonds. Gold set for best three-day rise in a month
Kitco (Reported 10/25/2011)
A look at the price screen Tuesday once again finds most commodity futures markets trading on the plus side, led by sharp gains in crude oil as that market has posted a bullish upside technical breakout this week. U.S. stock indexes are also firmer Tuesday. These types of “risk on” days recently have seen precious metals prices appreciate. Comex Gold Firmer As It's Another "Risk On" Day In Market Place
Technical Overview
DEC GOLD
Market is within proximity of this week's projected resistance range of 1716.08-1666.10, which may provide a likely zone for topping action or setbacks.
DEC SILVER
1* Market is challenging a previous daily swing high and may attempt a breakout. Closing beyond 3267.50 calls for continuation rallies. A failure around 3267.50 cautions for a reactionary setback. 2* Yesterday's close has penetrated above a key (3162.83) resistance point, implying a trend turn and follow-through moves in coming days. 3* Market is within proximity of this week's projected resistance range of 3385.90-3214.60, which may provide a likely zone for topping action or setbacks.
DEC COPPER
1* Market showing a preliminary breakout over a previous daily swing high and needs to quickly extend rallies into a close beyond 346.35. Failure to extend the breakout today-tomorrow alerts for a bull failure. A close under 330.23 helps confirm a breakout failure. 2* Market is challenging a previous daily swing high and may attempt a breakout. Closing beyond 346.35 calls for continuation rallies. A failure around 346.35 cautions for a reactionary setback. 3* The upside target zone for this pattern is from 368.95 to 389.60 with a close under 319.87 needed to negate a bull trading stance. 4* Market is within proximity of this week's projected resistance range of 359.96-350.40, which may provide a likely zone for topping action or setbacks.
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